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Digital marketplace to promote long-term returns

A startup backed by prominent Silicon Valley names is moving toward creating a new US stock exchange, one with additional rules for companies and investors designed to reward long-term shareholding and business strategies to generate long-term results. The LTSE is a more radical approach in some ways, as it proposes to build and operate an entirely new stock exchange. The exchange and listed companies would have to satisfy all of the normal SEC requirements that would allow shares to trade on other regulated US stock markets. On top of those, companies that list on the LTSE would agree to additional requirements that the SEC would enforce. One potential obstacle to starting a new stock exchange is the challenge of getting the first companies to list on it, given uncertainty about whether there will be adequate investor activity to provide liquidity and fair prices. To solve this, the LTSE aims to allow companies to have dual listings, with their shares also trading on any other US regulated market, such as the NYSE or Nasdaq. Ries declined to say how the LTSE would make money, but companies would presumably have to pay to list, which could be an obstacle to getting them to sign on.

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